Disney's CEO Says Reports of ESPN's Demise Are Ridiculous

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Disney's CEO Says Reports of ESPN's Demise Are Ridiculous

Victorious teenage and young male american football team holding up ball

Pete Saloutos

Disney CEO Bob Iger took pains during the company's quarterly earnings call today to defend ESPN, whose fiscal future has been the focus of much skepticism lately. Iger says all the doubt is unwarranted: the sports network is doing great, he says. But words are one thing, numbers another as the sports network faces higher fees, fewer viewers, and lower profits.

"It's great for distributors, it's great for consumers, it's great for advertisers," said Iger, in full cheerleading mode. “I believe, with great confidence, that it’s going to thrive in whatever new media world order we’re experiencing.”

Late last year, investor concerns grew that ESPN might be hemorrhaging subscribers. In November, the company revealed in a regulatory filing that it lost three million subscribers over the course of one year. That came after losses discussed in its earnings call last August that the company said today were mistaken.

In its quarterly earnings report, the company noted that ESPN is facing lower profits due to higher programming costs and fewer viewers, but has seen an increase in advertising and affiliate revenue. But Iger said that the company has seen an "uptick" in subscribers for ESPN in the past few months, and that the company has seen success with its partnership with Dish in particular to allow ESPN to stream on Sling TV.

"We believe we benefit from certain light packages ESPN has been part of," Iger added. "But you have to conclude that sports is very, very popular in this country. ... It's among, if not the, most popular programming out there." He added that, year after year, live sports remain "among the highest rated programming across television."

“The notion that either the expanded basic bundle is experiencing its demise or that ESPN is crating in any way from a [subscribers] perspective is just ridiculous,” Iger said at one point. “Sports is too popular.”

But as much as the network and Iger would like you to believe otherwise, sports and ESPN aren't one in the same. Investors seem to feel the same way: despite reporting record profits thanks to Star Wars, Disney shares are down 3 percent in after-hours trading.